Official dollar, the “blue” forces of heaven and Georgieva’s heel: urgent exchange notes

How much will the official dollar cost in three weeks?

In times of excess, we go to the pilgrim: while the president Javier Milei He traveled to Davos to divert the silver eyes from the central issues and attract the attention of the ineffable Elon Musk, The economy as a whole is subject to the forces of heaven.

Aside from inflation, which in its wholesale version showed a December close to 55% (it is seen that the prices in pesos were not adjusted to the blue) and the important changes in relative prices that the Government ordered, there is a question that reverberates among the different actors in the financial market: When is the next devaluation (dollarization jump) of the Argentine peso coming?

First we will have to add two strong pieces of information. December inflation, which stood at 25.5%, and the completion of the agreement with the International Monetary Fund (IMF), with a committed disbursement -meager- of US$4.7 billion. Let us also add – aside from the orthodox-liberal speech in Davos – the strong commitment of the Government (with the IMF) to adjust the fiscal deficit, which instead of the slide from 5% to 2%, committed more, in the idea of ​​reducing the spending and improve fiscal accounts.

However. Of course, the equation summarizes complexity between structural and eventual, situational issues. But there is a framework that deserves to be taken into account. What does Minister Caputo think?

Bopreal and CCL dollar

Due to the actions and omissions, due to the encrypted communication and the Borgesian cipher of its spokespersons, due to the statements of several officials of the economic team, one could take a lightning trip to the mind of the Messi of finances. The jump of the CCL dollar to the $1,300 area and the coupling of the rest of the MEP and blue quotes shows that, for now, the rise (we will see the effect of Bopreal) does not stop. The cost of standing in pesos is very high. One more fact: with the gap in the 60% area, analysts point out that the Bopreal is better than the CCL, since it yields $1,183 vs $1,300. Therefore, there will be demand for Bopreal.

What does Caputo think? That the idea of ​​devaluing a little more strongly than was thought was correct: it was expected that the price of the dollar would be set at $650 and it went to $800. He thinks that this generated a “time buffer” and enthusiasm. -there is some inertia of that evaporable happiness- and even the Government increased that “enthusiasm” with the DNU and the omnibus bill that is advancing with agreements in Congress.

financial talonism

However, honesty of prices, both in terms of rates and in many other regulated sectors, such as gasoline and prepaid, is the Achilles heel. Because in the Government’s supposed plans – let’s think carefully – the enormous inflation generated in these weeks should slow down. What could one think? That the Government is not going to generate a new devaluation, at least not one as high as the one seen in December. And energy prices should not jump again in that dimension either.

So, inflation should slow down and not spiral.

Obviously, in the Treasury Palace there is fear of the exchange gap, because that drives devaluation expectations and erases? part of the supposed “beneficial effect” of the devaluation, having to restart that path, path that on the other hand salaries do not do in the same way.

Official dollar and after

And the promise to devalue the official 2% monthly? If you look at the future dollar market, it is expected to accelerate to 5% in February and begin jumping 10% monthly in subsequent months. And here comes the relevant thing. The Government then bets on using the 2% crawl as an anchor for a while, while it “finishes” adjusting relative prices, and then replaces one inflation with another inflation (exchange rate).). That is, insured, self-generated and liquefaction inflation. And the crawling? It would accelerate, after devaluation, while the agricultural dollars arrive. Will inflation slow down? The question is not whether to devalue again, but how much and when.

Finally, the Achilles heel could also come via the IMF. Because in recent days, it was the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, who gave her opinion on the “advances” in the Argentine economy under the management of President Javier Milei. Although the Bulgarian economist praised the efforts “on all fronts” to address the country’s complex economic situation and highlighted the aggressive correction of deficiencies by the new libertarian Government, especially on fiscal issues, she also assured that at IMF is “deeply” interested in Argentina protecting the most vulnerable population while it continues with its “very bold reforms.”

Weakness is marked by the IMF

The IMF It seems to agree with the Government that the next few months will be the acid test for President Milei starting today, mainly due to the inflationary impact that, discounting a fantastic December, would accumulate in the quarter. It is the IMF itself that seems to warn about social sustainability. As has already been said in this column, Georgieva is concerned about the sustainability of the adjustment plan. Paradoxically, the IMF tells the Government to ease up on the adjustment because, otherwise, there will be no more adjustment. That the game is long. Thus, what for the Government is an attribute (adjusting more than what the IMF requests), for the Fund is a problem to be solved. Strictly speaking, she had already mentioned it in a statement: we must “preserve the real value of pensions and increase social assistance.”